Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
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another investor Argos http://telegraph.uk-wire.com/cgi-bin/articles/201103091056326146C.html?epic=TAN
Now we’ve got the funding I'd expect an announcement of the first new plant (s) at any time. It was unfortunate that on this side of the Atlantic the news coincided with Modec going into administration it may have deterred some from buying in. IMO in Europe we are still sceptical about EV’s, people still see restricted distance a major problem … the what if scenario. I think that’s what’s preventing many from investing … and low sales. In the states they see things the other way round, they see all the advantages …. A very different mentality.
Good few links there. I imagine we might be able to see a bit more coming from all of the Table of Twenty customers. These should cover the first expansion. They seem to have checked the demand before listing. Now we just have to hope these customers go through with it, but they all seem to fully understand the benefits and the company has talked them through all they key points. Will be great to find out exactly what expansion will happen and to see the time-scales. Given all the data out there I imagine we'll see an IPO in 2013 after this first expansion has settled, but I guess it depends on demand. It's all about keeping good margins and seeing how far we can push that IPO valuation. The hopes are even for as high as $1bn for this. It's not unrealistic as this is an exciting industry and we have the lead company as far as I can tell.
http://www.businessfleet.com/News/Story/2010/10/Staples-Introduces-New-All-Electric-Vehicles-Into-Delivery-Fleet.aspx?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BusinessFleet+%28Business+Fleet%29 http://www.automotive-fleet.com/News/Story/2010/10/Staples-Adds-All-Electric-Vehicles-to-Delivery-Fleet.aspx
http://licn.typepad.com/my_weblog/2010/12/electric-trucks-gain-traction-carl-schwab.html "Frito-Lay, meantime has ordered 176 Smith electric delivery trucks, The snack foods maker intends to convert up to half of its 4000 medium-duty delivery trucks to battery-powered vehicles. Frito-Lay spokesman says, "We are not making a trade-off and doing a good deed for the sake of a good deed". There is a great return on the investment"
It's not the article I'm thinking of but 4th paragraph indicates there intentions. http://www.bloomberg.com/news/2011-01-20/frito-lay-staples-salesmen-compete-for-keys-to-electric-delivery-trucks.html
I'm sure it was mentioned in an article, where a Frito Lay EV got stuck in the snow...??... If nothing is posted in the meantime, I may have the link stored on my laptop at home and will post later?
Sorry guys if I got it wrong ... been trying to find the link I 'm sure I saw something on advfn but can't find as yet.
I think it was frito so maybe another article mentioned it 'unofficially'.
I remember something long those lines but don't remember the numbers… substantial anyway. No doubt in my mind SEVUS will be very successful so I hope we retain a decent stake. A little sad that the UK couldn't have shown the appetite for electric trucks the US now seem to be showing. Though that should also serve as a caution that companies don't always follow through on their stated appetite for EVs.
Agree, to have given up all production to one customer would have been an all mighty blunder. But it does show the massive pent up demand for Smiths EV's. As you say SEV is not planning to open 20 new factories for no reason. Frito Lay, Staples etc. have been keen to endorse the benefits of the vehicles and publicly state that they want them to form a higher proportion of their fleets.
Thanks to Totally Banjo on Advfn for finding the article below.
by Chris Knox, The Journal Mar 8 2011 MANUFACTURER Tanfield looks set to be in line for a significant investment after the US company which bought half its electric vehicles revealed plans to raise £32.6m. Washington-based Tanfield sold its Smith Electric Vehicles business, which opened in Stanley more than 90 years ago, to its associated American firm Smith Electric Vehicles US Corporation – SEVUS – for £9.4m earlier this year. Almost 200 UK staff shifted from Tanfield to Smith Electric Vehicles Europe Ltd, the new UK subsidiary of SEVUS, in which Tanfield retains a 49% stake. The initial sale of the electric vehicle business has helped Tanfield to support its core cherry-picker operations and work towards getting back in the black, after cutting its losses from £10.4m to £9.8m in the six months to June 30. Tanfield now looks set to continue benefiting from the deal after SEVUS announced its intentions to raise £32.6m through a private share placing. Although Tanfield could not comment on the deal, as it is currently in a closed period before it publishes its financial results in April, it is expected that the firm will receive a big slice of the earnings. It is believed that this share placing will also help the US company to grow significantly as it considers a flotation on the New York stock market. Although Tanfield’s share in the US business could be reduced through the share placing, it is expected that any future flotation on the stock market would still see the Washington firm receive a sizeable payment. As well as a potential flotation, it is understood that a deal to supply commercial electric vehicles to the Hong Kong government could be in the offing in the near future. Tanfield’s share price responded favourably to the news, with the stock rising six points to 42.25p yesterday. Vinay Bedi, divisional director at Brewin Dolphin stockbrokers in Newcastle, said: “Given that Tanfield issued such a subdued trading report at the start of the year, this news will certainly be pleasing to the company’s shareholders. “The company is much smaller since it sold on the electric vehicle business. However, with such a large shareholding in the US company, it stands to gain an awful lot in the future, particularly if there is a flotation.” Tanfield, which still employs around 250 staff in the North East, has recently signed a deal to take over the design and production of lightweight, push-around Pop-Up lift from its parent company in Wales, which will create 10 jobs in Washington. The firm’s net cash in the bank stood at £3.6m at the end of December, compared to £2.2m on June 30. Smith Europe currently leases factory floor space from Tanfield at the same site where its aerial platforms are built. http://www.nebusiness.co.uk/business-news/latest-business-news/2011/03/08/washington-based-tanfield-in-line-for-
The news of the opening of each new plant should help to generate substantial interest in the IPO. It provides further evidence that SEV is an exciting new company and growing fast with a product that is clearly in great demand. Importantly it means that SEV will be able to have the production capacity to maintain and strengthen their lead on the large established vehicle manufacturers. Myo a few months back I think you mentioned an unsubstantiated report that one company in the US would have liked to have placed an order equal to the entire annual production capacity of the Kansas plant, or there about. If that’s right then the likes of Frito Lay, Staples etc. could be lining up some substantial orders just waiting for the production capacity to become available before announcing them. What a paradox, in the UK Modec going into administration due to lack of demand, whilst in the US SEV raise enough cash for 5 or more new plants to meet soaring demand. Again a sad case of UK technology leading the world but not in the UK.
Don't forget that both companies serve different markets. One has been on the up for a while, but the other is starting to recover. I believe no dividend will be paid out bar a token one.
"the company now holds 32.2% of the outstanding issued shares in SEVUS on a fully diluted basis" This implies we now own fully 100% of this with no further dilution from terms of this raising. As for the exact maths. They raised $58m for what appears to be 34.3% (we now own 32.2% and SEVUS retains 33.5%). From the new listing we can value the company at: 58*100/34.3 = 169.2m This values our 32.2% stake at $54.5m or £36.3m. Which values our core business including all that cash ($5m of which we were just paid) at £2m. The big moment is the IPO. By this point we'll have say about 10 factories working profitably looking for a second round of expansion. I can't do much number work due to time, but a ball park value at this point is $500m (we can update this when we get more figures) listing for $100m. If this were to happen then we would lose 20% of our 32.3% stake cutting us back to 25.76% ownership, which is a value of $128.8m for our stake. Then we get long term benefits of holding a great company.
Don't get me wrong - I'm a big supporter of this stock for all sorts of reasons, and I've been in it for some time - despite the hair-raising ride - but this is not a gimme by any means. TAN's half year losses are running at around £10m. Net cash in December was £3.6m and that's after the £1.8m offer and the $1m SEVUS exclusivity option. I presume there's been $750,000 per month coming in from SEVUS since January but that's now changed for a block payment of $5m until September (the 203 days). Simple maths suggest TAN is getting weaker and SEVUS is getting stronger (though come on Myo - you know the difference between vehicle output and sales revenue). So i guess what I'm saying I'd like to see the 2010 annual report out as soon as possible highlighting how TAN is a) going to capitalise on its SEVUS position and b) get back to operating profitablity. I presume a dividend forecast is out of the question!
Thank you for your indepth reply. I am aware you have been following these for sometime. Your assumptions make sense but will there be any further dilution before we have the IPO? I will watch with interest. I'm also please that TAN will get some money for working capital but as for truck numbers, we are not in any form of normal economy and I fear we are already into a further recession. (just forget the stats) so hard to accept Eventually we will come out of it but don't know when. For me, I fell in love with these (BIG mistake to fall in love) several years ago, in and out but mainly in. I still follow them and participated in the 10p offer but I need about 120p to get back in the black. Once gain thanks and GL.
I don't remember seeing the placement price? TAN have a 32.2% (third roughly ) of something.
We should get used to lack of detail on TAN holdings in SEVUS. TAN have never been good at keeping shareholders informed. Progress is being made as SEVUS so that at least is a positive but you are correct we should not jump to conclusions about what it means for TAN. I've been in TAN for a while so have accepted the poor newsflow but it must be a turn off for any potential new investors in TAN. I am not concerned about dilution if the added value compensates but obviously we want to retain as high a % as possible for the IPO where dilution will occur.
If there is dilution we can build a fairly good picture of what is going on. We can put bounds on this of 30-50% on the basis that they are going to value the business currently at at least $50m so at most this is raising of $50m for 50% making our stake worth $25m and making Tanfield's core business worth $35m. At the other end of the scale the business is valued at about $100m and our stake becomes worth about $55-60m. In the middle they sell 40% of the company for $50m leaving us with a stake worth $37.5m. None of these would be disastrous and given that SEVUS has to be worth at least $50m we own a stake currently valued at $25m or more which will increase for the eventual IPO. Now if this does not affect our stake our stake must be worth in the region of $100m and the company would update us in due course. It does seem strange that we have not been given more on of a listing that would diminish our stake in another company. Taking the worst case scenario (valuing our stake at $25m) we will own 25% of SEVUS. If they were to use this money to make 100,000 trucks a year we're looking at a valuation of about $500m. In this case to launch round two of expansion they would be likely to have an IPO selling 20% of the company for $100m. This would reduce our stake to 20%, but value our stake at $100m. In the best case scenario, we retain 50% and become worth about $200m after the IPO worth $500m to fund the second round of expansion. There's almost no data to work off, but that covers the best and worst case scenarios bar the one where the company is not successful, but note that the raising was launched on the day of the Table of Twenty meeting. Read into that last item what you will.
Calm down everyone! Until we see whether this fund raising by SEVUS includes pro rata participation by TAN or dilutes its shareholding we don't know whether this is good news or not. This was always my fear on this proposition - that SEVUS would find a way of funding in the US which effectively diminished the value to TAN. IF SEVUS had gone the IPO route then TAN's 49 per cent stake goes straight onto the TAN balance sheet. But if it goes thediscounted placement route then there's no published market value to that stock and TAN has to take a cautious/prudent valuation for balance sheet purposes otherwise the auditors get sniffy. So all this talk about SEV vehicle output doesn't matter if TAN is being sidelined! And I don't know how good the existing TAN board is when it comes to keeping tight hold of this asset. Perhaps they should, given the new circumstances re SEVUS, put out a 'material impact' statement of their own.